One of us had just
landed in Vancouver, Canada, for a huge “Shout Out Against
Mining Injustice”
when we got the news: A tribunal in Washington, D.C. that nobody elected
recently issued a verdict that will potentially constrain the democratic rights
of millions of people.

The International Center for the Settlement of Investment Disputes (ICSID), a tribunal located at the World Bank, ruled that Canadian mining company Pacific Rim may continue to sue El Salvador for not
letting the company mine gold there. The impoverished Central American country
could potentially be forced to pay the foreign company
$77 million or more in damages. The anti-democratic ruling has ominous
implications for all of us.

We visited El
Salvador last year to learn more about
this landmark case. A wide vein of gold lies alongside the northern
portions of a large river that flows down the country's middle, providing water
for more than half the population. The gold remained relatively untouched until
about a decade ago when foreign companies began to apply for mining permits.

Farmers and others told us that they were
initially open to gold mining, thinking it would bring jobs to ease the area's
deep poverty. But, as they learned more about the toxic chemicals used to
separate gold from the surrounding ore and about the massive amounts of water
used in the process, they began to organize a movement that opposed mining.
Their simple cry: "We can live without gold, but we can't live without
water."

Laws and trade pacts
like these grant corporations the right to sue governments over
actions—including health, safety, and environmental measures and
regulations—that
reduce the value of the corporation's investment.

By 2007, polls showed
close to two-thirds of Salvadorans opposed gold mining. In 2009, Salvadorans
elected a president who promised he
wouldn't issue any new mining permits during his five-year term. He has kept
this pledge.

But Pacific Rim
didn't sit idly by as democracy worked its way from El Salvador's northern
communities to its national government. The company sought a mining license.
When the government rejected its environmental impact assessment, the Canadian
company resorted to lobbying Salvadoran officials. And, when its lobbying
failed, Pacific Rim lodged a complaint against El Salvador
at ICSID in
Washington under a U.S-initiated trade agreement and a little-known investment
law in El Salvador.

Protest signs slipped under the door of PacRim office in Vancouver, BC.

Photo by Brent Patterson

Laws and trade pacts
like these grant corporations the right to sue governments over actions—including health, safety, and environmental measures and regulations—that
reduce the value of the corporation's investment.

To the surprise of
many observers, the tribunal ruled on June 1 that Pacific Rim can
proceed with the lawsuit against El Salvador. Even if the cash-strapped Salvadoran government wins in the end, it
will likely have to shell out millions on legal fees to defend an action taken
after lengthy democratic deliberations. If it loses in the tribunal's next
ruling, it will cost even more.

Laws and trade
agreements
that allow corporations to sue governments should worry us all. No
international tribunal should have the right to punish countries for laws or measures
approved through a democratic process, be it in the United States, El Salvador,
or anywhere else. President Barack Obama said this himself in 2008 when he
promised, while campaigning, to limit the ability of corporations to use trade
agreements to sue over public interest regulations.

No international tribunal should have the right to punish countries for laws or measures approved through a democratic process, be it in the United States, El Salvador, or anywhere else.

Yet the Obama
administration is currently negotiating a Trans-Pacific Partnership with
several countries. And it's pushing for provisions that would allow companies
to sue governments under this trade pact.

But an expanding coalition of labor,
environmental, religious, and other groups opposes giving Big Business this
privilege. A similar coalition in Australia, another country negotiating this
trade deal, has convinced its government to oppose such corporate
"rights." The Trans-Pacific
Partnership
may well prove an opportunity for this outrageous assault on democracy to be
defeated.

Democracy belongs to
the people. Those of us standing up to defend democracy and counter corporate
abuse should strongly oppose any new "rights" for corporations being
written into new trade pacts as we try to overturn the existing ones.

Treaty Like It's 1999From Japan, Raj Patel on the expansion of the Trans-Pacific trade agreement and the homegrown battle to stop it.

In
Vancouver, we did not sit by idly when we heard the tribunal’s decision. The day after the decision was
announced, 200 of us marched to the headquarters of Pacific Rim where
Salvadoran anti-mining activist Vidalina Morales vowed
that the broad-based National Roundtable on Metallic Mining would continue to fight to keep Pacific Rim out of El
Salvador and asked for international solidarity.

For more information:

Public Citizen's action pages, including petitions to World Bank president Jim Kim and President Obama protesting upcoming trade agreements, investor-rights clauses, and the International Center for the Settlement of Investment Disputes

This blog was adapted from Broad and
Cavanagh’s article distributed by the Institute for Policy Studies’ op-ed service.

Robin is a Professor of International Development at
in Washington, D.C. and has worked as an international economist in the
U.S. Treasury Department and the U.S. Congress. John is director of the
, and is co-chair (with David Korten) of the.
They are co-authors of three books and numerous articles on the global
economy, and have been traveling the country and the world for their
project Local Dreams: Finding Rootedness in the Age of Vulnerability.

Interested?

To protect their water supply, Salvadorans are trying to ban corporate gold mining—and facing threats and violence as a result.

With the eyes of the world on mass protests against corporate control of
governments, El Salvador debates a new ban on gold mining.